There will be no surplus on Minden Hills' $12.75-million arena project leaving the cost of additional ” value-added=” items”=” up=” the=” township.=” chad=” ingram=” staff=” “= By Chad Ingram
It appears there will be no surplus on the Minden Hills arena project, meaning there will be no money in the project’s “profit pool” for “value-added items” at the facility.
Councillors for the township received an update on the $12.75-million project’s finances during a May 14 committee-of-the-whole meeting. The contract for the facility was awarded to the joint project delivery team of McDonald Brothers Construction and Parkin Architects Limited, with the construction firm overseeing the tendering of sub-trades on the project.
“MBC [McDonald Brothers Construction} has advised that, based on completed tenderers and items that remain outstanding, a project surplus is unlikely,” read a report from chief administrative officer/treasurer Lorrie Blanchard. “Staff is seeking direction from council regarding the approval of any added value items, as well as the source of funding.”
“MBC [McDonald Brothers Construction} has advised that, based on completed tenderers and items that remain outstanding, a project surplus is unlikely,” read a report from chief administrative officer/treasurer Lorrie Blanchard. “Staff is seeking direction from council regarding the approval of any added value items, as well as the source of funding.”
Value-added items are ones not included in the project’s budget, which range from a retractable stage to paving a portion of the parking lot to office furniture for community services staff, who will have office space inside the new building. Under the integrated project delivery framework of the project, any savings found from tendering sub-trades was to be directed into a contingency account known as the “profit pool,” with any
monies in that account to be split between the builders and the township once the project was completed. The township would then use its portion of the money for some of these valued-added items. Last summer, $80,000 was “released” from the project’s contingency fund, half of it going to the construction and architecture firms, and half to the township, with Minden Hills’ share going to cover some of the early integration costs of the project. In December of 2019, McDonald Brothers Construction requested and received from the township an additional $250,000 to complete the project, growing its initial budget of just less than $12.5 million to just less than $12.75 million.
monies in that account to be split between the builders and the township once the project was completed. The township would then use its portion of the money for some of these valued-added items. Last summer, $80,000 was “released” from the project’s contingency fund, half of it going to the construction and architecture firms, and half to the township, with Minden Hills’ share going to cover some of the early integration costs of the project. In December of 2019, McDonald Brothers Construction requested and received from the township an additional $250,000 to complete the project, growing its initial budget of just less than $12.5 million to just less than $12.75 million.
“In fact, we didn’t have savings, we had to give them more to get the project done,” Councillor Bob Carter said during last week’s meeting.
The list of possible value-added items sits at approximately $440,000, $130,000 of which can be paid for through an Ontario Trillium Foundation grant, leaving approximately $310,000 worth of costs to the township.
All members of council seemed to agree that of the value-added items, the crucial one was office furniture for community services staff.
“People need somewhere to work,” said Mayor Brent Devolin.
All members of council seemed to agree that of the value-added items, the crucial one was office furniture for community services staff.
“People need somewhere to work,” said Mayor Brent Devolin.
While quotes for office furniture and other value-added items had been attained through McDonald Brothers Construction, Carter noted that markup on these items is substantially higher than the anticipated markups the company had initially provided.
“Our markups are 82 per cent, and they estimated 20?” Carter said. “They were that far off?”
“Our markups are 82 per cent, and they estimated 20?” Carter said. “They were that far off?”
Council seemed to agree that tendering for value-added items or provision of any associated services should be brought in-house at the township at
this point.
“I don’t think we need our engineers and construction company to be helping us with our interior decorating,” Carter said.
In February of 2019, Carter, along with councillors Pam Sayne and Jennifer
Hughey voted against proceeding with the project as proposed, voicing concerns about its price tag and awarding the contract to a lone bidder.
The bid from McDonald Brothers and Parkin was the only one the township received. Mayor Brent Devolin, Deputy Mayor Lisa Schell and councillors Jean Neville and Ron Nesbitt voted to proceed.
this point.
“I don’t think we need our engineers and construction company to be helping us with our interior decorating,” Carter said.
In February of 2019, Carter, along with councillors Pam Sayne and Jennifer
Hughey voted against proceeding with the project as proposed, voicing concerns about its price tag and awarding the contract to a lone bidder.
The bid from McDonald Brothers and Parkin was the only one the township received. Mayor Brent Devolin, Deputy Mayor Lisa Schell and councillors Jean Neville and Ron Nesbitt voted to proceed.
The township is paying for the majority of the project through a loan from provincial lending organization Infrastructure Ontario, and Blanchard’s report indicated that because of interest rate decreases amid the COVID-19
pandemic, the township would be paying $71,000 less in interest than anticipated. The plan had been to repay the loan – up to $11.9 million – over a 30-year period, and given the new information, Carter said he’d like to see figures for a 25-year repayment.
pandemic, the township would be paying $71,000 less in interest than anticipated. The plan had been to repay the loan – up to $11.9 million – over a 30-year period, and given the new information, Carter said he’d like to see figures for a 25-year repayment.
Construction on the project was paused for a month amid the COVID-19 pandemic. It is expected to be completed in the summer.
